Versions of roi, Financial Accounting

A huge number of variations of ROT are determined in practice, based upon how "Investment" and "Return" are explained "Investment" may be explained to comprise any of the subsequent:

1.  Gross capital employed:              

Net fixed assets + total current assets + other assets Ratio Analysis

2.  Net capital employed:                

Net fixed assets + net current assets + other assets

3.  Proprietors' net capital:               

Total assets - (Current liabilities + long-term employed borrowing + any other outside funds)

4. Average capital employed:       

Opening + closing balances of capital, reserves, accumulated depreciation and borrowings/2

As the same, 'Return' may be explained to include any of the subsequent:

1 Gross profit

2 PBDIT that is Profits before depreciation, interest and taxes

3 Profits before depreciation, interest and taxes but excluding capital and extraordinary nary profits: PBDIT

4 PBT that is Profits before tax

5 Profits before tax but excluding capital and extraordinary profits as: PBT, the subsequent versions of ROI are utilized in practice as:

1. Gross Return on Investment =Gross Profit/Total Net Assets

2. Net Return on Investment = Net Profit/Total Net Assets

3. Return on Capital Employed that is (ROCE)                                                              

= Profit before tax + Interest/Net Worth+ Interest bearing debt.

4. ROI (based on PBDIT) is = PBDIT as per cent of average capital   Employed

5. ROI (based on PBT)

= PBT average of capital and Investment Analysis as percent of reserves

Posted Date: 4/9/2013 2:10:42 AM | Location : United States







Related Discussions:- Versions of roi, Assignment Help, Ask Question on Versions of roi, Get Answer, Expert's Help, Versions of roi Discussions

Write discussion on Versions of roi
Your posts are moderated
Related Questions
Calculation of Liquidity ratios Current Ratio and Acid-Test Ratio -               2008 2009 2010 A

I've tried everything im just really lost. I have to enter into T accounts. Common stock $5 stated value (900,000 shares authorized, 620,000 shares issued)................. $3,100,

1.Which of the following is true? A. Land is depreciated using the straight line depreciation method B. Land is amortized using the declining balance method C. Land is depleted usi

(a) IFRS 8 Operating segments requires that segmental information be provided by listed entities. Clearly FGH is looking to list and hence IFRS 8 will be applicable. The disclosure

concept meaning features scope importance origin initiative in india

Write at least 7 full pages that analyzes the internal and external environments for your organization. This paper must be in essay form. [If you have formatting questions, refer t

Company A(lessee) will rent inventory for you for 3 years rather than buying it for the regular price of $240,000. Normally these units, which cost us $120,000 to produce, will las

Maghrabi Enclosure follows a moderate current asset investment policy, but it is considering whether to shift to a different strategy. The firm''s annual sales are $500,000; its f

1. What will be the value of every of these bonds when the going rate of interest is 4%? Suppose that there is only one more interest payment to be made on Bond S. Round your answe